Yahoo is prepping to lay off 10% or more of its workforce

Major layoffs will be coming to Yahoo as part of its
planned reorganization to get its business back on track.

The company is working on a plan to cut at least 10% of its
workforce, said sources familiar with the situation. The cuts
would reduce Yahoo's headcount by more than a thousand
employees and could begin as early as this month, the sources
said.

While the cuts are expected to affect all parts of the company,
Yahoo's media business, European operations, and
platforms-technology group, which includes the technology that
supports the company's services, could be particularly hit in the
restructuring.

"A team is working on it and they want to do it this quarter,"
one of the sources said of the layoffs.

Yahoo declined to comment on the layoffs, but the company
has acknowledged that change is afoot.
In response to criticism from activist investor Starboard,
Yahoo told Business Insider earlier on Wednesday that the
company plans to announce "additional plans for a more
focused Yahoo on or before our Q4 earnings call," which should be
in the next few weeks.

Several employees told Business Insider that they have been
bracing for layoffs since Yahoo
hired McKinsey & Co. in November to mull a reorg and
decide which units to potentially shutter. The company has
decreased its headcount by 14% over the last year in a steady
drip of layoffs,
according to its most recent quarterly report, but it still
employs more than 10,000 people. Trimming by 10% means that more
than 1,000 people would leave Yahoo.

One major focus of Yahoo's reorganization is its media
properties, or "digital magazines," as the company calls them.

Last week, the company announced that
it had shuttered Yahoo Screen, its larger all-encompassing
video hub to build out the magazines. But those magazine
divisions still have not seen their budgets for 2016,
stalling their coverage, one Yahoo insider tells us. Without a
budget, coverage of events like the Golden Globes this
weekend is up in the air, a person familiar with the matter
said.

To cut more costs, the company also scaled back operations at its
production studios for the last two weeks of the year to save
money on contractors, another person familiar with the matter
said. The timing of the layoffs also comes ahead of when Yahoo
typically doles out annual bonuses.

Meanwhile, the company
has been quietly shopping around a large parcel of land near
its Silicon Valley headquarters that was once its designated
landing zone for corporate expansion, signaling that those plans
have likely been put on hold indefinitely.

Re/Code's Kara Swisher first reported in December that a major
media restructuring was
expected. That part of Yahoo's business had
moved to the control of Martha Nelson, who replaced Kathy
Savitt
after she left to join STX Entertainment. Under Nelson, Yahoo
hired another Time veteran, Mark Golin — a leader some Yahoo
employees feel is there to lead the consolidation of some of the
media teams.

It will take a few weeks before the full picture of the future of
Yahoo crystallizes, but its employees are bracing for the ax to
fall soon.